State Auditor Finds $38.5 Million in Hawaii Superferry Harbor Improvements Not Needed; OEQC Must Clarify EIS Rules

On the eve of oral arguments regarding the constitutionality of Act 2 (2007) in the Superferry Case, the Office of the Auditor released Report No. 08-11, Performance Audit on the State Administration's Actions Exempting Certain Harbor Improvements to Facilitate Large Capacity Ferry Vessels from the Requirements of the Hawaii Environmental Impact Statements Law:  Phase II.

According to the Audit,

. . . Last summer, Hawaii Superferry officials announced that they will be outfitting their second ship with an onboard ramp, a feature that eliminates the need for the $10 million barge-and-ramp system at Kawaihae Harbor and the $2.5 million ramp at Nawiliwili Harbor, both built to accommodate Hawaii Superferry and no other users. If company officials choose to retrofit their first ship, the Alakai, with a loading ramp, the State’s entire $38.5 million barge-and-ramp system would quickly become unnecessary. Because the barges were designed specifically for Hawaii Superferry use, they cannot be repurposed in their present configuration by other harbor users. In addition, since they were built in China and are therefore prohibited from transporting cargo within U.S. waters, the barges may have little use for potential buyers. This situation would have been avoided if state officials had required Hawaiÿi Superferry to carry an onboard ramp in the first place.

We also found that the legislation on behalf of Hawaii Superferry compromised the State’s environmental laws and set a worrisome precedent for future government accommodation that puts the interests of a single business before the State’s environmental, fiduciary, and public safety responsibilities.

Regrading Hawaii's EIS law, the Auditor recommends that the Office of Environmental Quality Control ("OEQC") should (1) establish guidelines, including a checklist for agencies determining exemptions from Hawaii EIS law; (2) establish a process to provide guidance to agencies in determining whether an action is projected to have a significant environmental impact which would make an exemption inapplicable; (3) amend the EIS rules to ensure the OEQC provides training to state and county agencies; (4) clarify the agency consultation process regarding proposed exempted actions; and (5) establish clear definitions of cumulative and secondary impacts.

The OEQC already provides some guidance on exemptions in its Guidelines on Exemptions from Preparing Environmental Review Documents.  The terms of art, "significant environmental impact" and "cumulative and secondary impacts",  identified by the Auditor are defined by rules adopted by the Environmental Council under HAR § 11-200-2.   Cumulative impact is defined as follows:

. . . the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.

The terms secondary impact,  secondary effect, indirect impact, or indirect effect are defined as follows:

. . . effects which are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable. Indirect effects may include growth inducing effects and other effects related to induced changes in the pattern of land use, population density or growth rate, and related effects on air and water and other natural systems, including ecosystems.

Finally, significant effect or significant impact is defined as follows:

. . . the sum of effects on the quality of the environment, including actions that irrevocably commit a natural resource, curtail the range of beneficial uses of the environment, are contrary to the state's environmental policies or long-term environmental goals and guidelines as established by law, or adversely affect the economic or social welfare, or are otherwise set forth in section 11-200-12 [list of enumerate significance criteria] of this chapter.

Because of the elasticity of these definitions,  these terms of art have been the subject of controversy and elucidated upon by the courts from time to time.  The Superferry Opinion issued by the supreme court in 2007, analyzes each of these terms of art in the context of whether it was proper for the DOT to exempt actions related to the Superferry from Hawaii's EIS law.  The Opinion also sets forth, in clear detail, the exemption process.  

Post-Superferry, the OEQC will need to harmonize over a decade's worth of judicial interpretation into cogent, easy to follow procedural rules and guidelines, no small task.